The price of crude oil increased shortly after the vote by OPEC.
Baltimore, Md (KM) The price at the pump could be impacted by OPEC’s decision on Wednesday to curb oil production.
AAA Mid-Atlantic says the price of crude oil closed on Wednesday after the OPEC announcement at $49.44 per barrel. On Thursday, the price of crude went above $50 per barrel. In addition, the average price of gasoline in Maryland increased by three-cents to $2.20 per gallon on Thursday.
Spokeswoman Christine Delise says OPEC’s decision comes at a time when there’s a global glut of oil. “We’re now in the winter. Demand for gasoline is flat. We have ample supplies. So this price rise may be short term,” she says.
But Delise says this production cut by OPEC could lead American oil companies to ramp up production. “US oil production has been on the rise over the past seven years. It was at its highest level in 2015 since 1972. But it has been on the decline. Because of lower crude oil prices, production fell,” she says.
AAA says the US has been weaning itself away from foreign oil in recent years, but it still relies on overseas nations for much of its oil, especially Canada and Saudi Arabia.
“We are seeing prices creep up because of the rising crude oil prices over the past week,” says Delise. “But it’s more like a wait and see. Hopefully, when we get to the end of the year, we may see a little bit of a drop.”
The cut by OPEC (Organization of Petroleum Exporting Countries) in oil production takes affect January 1st. The vote by member nations reduces the production of oil by 1.2-million barrels per day.
By Kevin McManus